Morning Bell: Unemployment Goes Up, Obama Declares Victory

Unemployment in the United States increased again last month to 9.1 percent, with the Obama economy adding only 54,000 jobs—the fewest in eight months. Today’s terrible jobs report is much worse than expected. Economists surveyed by Dow Jones Newswires had grimly predicted 160,000 new jobs and an unemployment rate of 8.9 percent earlier this week.

But despite the dismal news that 13.9 million Americans remain unemployed, President Barack Obama is holding a victory party today at a Chrysler plant in Toledo, Ohio, trumpeting the only jobs he can manage to create—those bought and paid for directly by the U.S. taxpayer.

The President’s celebration comes amid word that Fiat SpA will pay $500 million for the U.S. government’s remaining 6 percent stake in Chrysler Group LLC, taking majority control of the company. For the Obama Administration, that’s news enough to signify a corporate turnaround following its bailout of Chrysler and GM in 2009, a bright spot in a day where millions are out of work. But what the President likely won’t mention is the continuing costs of the auto bailout that have fallen on the backs of U.S. taxpayers.

According to the government’s own reports, those costs come up to a staggering $14 billion, out of $80 billion shelled out to bail out Chrysler and General Motors in 2009. Then there’s other subsidies provided to Chrysler, as well as other automakers, including a plea for a new $3.5 billion loan from the Department of Energy to fund retooling of plants for more energy-efficient cars. But if you listen to the President (or an ad from the Democratic National Committee), his actions are responsible for saving an industry. Not so fast.

The Heritage Foundation’s James Gattuso explains that Chrysler and General Motors are where they’re at today because of a bankruptcy process, not because of a costly bailout that could set a dangerous precedent down the road.

President Obama should get credit for finally forcing the two into bankruptcy in early 2009. Unfortunately, however, it was accompanied by a massive inflow of taxpayer cash, government ownership of the two firms, and a manipulation of the bankruptcy process to advantage politically favored interests (notably the unions) at the expense of shareholders.

Going forward, the danger is that this intervention will become a precedent, legitimizing bailouts as a standard tool of economic policy. Such a result would be disastrous not just to taxpayers’ wallets but to the economy as a whole as firms (and investors) evade the consequences of their own decisions.

And if you hear the President brag today about the Detroit Three’s increase in market share in May, take it with a grain of salt. The Detroit Free Press‘ Sarah A. Webster writes that “the gain was largely the result of the sizable setback Japanese automakers endured as a result of the horrific March 11 earthquake and tsunami, which devastated the country and left much of its industry scrambling to get back to work, to try to build microchips and cars, among other products.” That’s no cause for celebration, either.

And when the President brags about Chrysler’s increased sales, keep another thing in mind, too. It’s not the President’s favored green cars that Chrysler customers are snapping up—it’s Chrysler’s SUV, the Jeep Grand Cherokee, that has lifted the automaker.

Then there’s this: Last week, DNC Chairwoman Debbie Wasserman Schultz (D-FL) hyperbolically stated “we would be driving foreign cars” absent the President’s actions. Today, the President will celebrate his hand-picked buyer, Italian-automaker Fiat, taking a controlling stake of Chrysler. But don’t forget that the company’s Italian CEO Sergio Marchionne once called the American taxpayers “shysters” for the high rates on the loans Chrysler demanded.

As always, the devil is in the details, and they likely won’t be invited to the President’s victory party today. You probably won’t hear mention of the other losers in the auto bailout, either, like the shareholders who suffered so President Obama could financially reward his political allies at the United Auto Workers union. Unfortunately, they’re not the only losers in the Obama economy, as America learned with the unemployment numbers that came out this morning.

At least 70 people were killed over the last five days around Homs, Syria, as part of President Bashar al-Assad’s continuing assault on protesters.

Treasury Secretary Timothy Geithner met with Republican freshmen Members of Congress yesterday, warning them it would be “lights out” if the debt ceiling is not raised, while also calling for an increase in taxes.

When do you stop idiocy from appearing your blog. There are forums for Ken Jarvis’s baloney on the web. I post on one to get some frustration relief from the idiocy I have thought about Heritage as the number one place for information and decent thought. It cannot be that as long as this guy poisons your site. Oh free speech cannot be curbed, but you do have a goal and that is to educate people and everyday he throws a roadblock in the way.

*** Thanks – Norm LA –

Since Obama has been Prez, have YOU ever read in HF – anything GOOD he has done?

Send me a link.

Things WILL GET BETTER.

===

John Arizona on June 2nd, 2011 at 10:56am said:

Why is it you people get into a contest with Ken Jarvis. Remember, he’s a union guy who voted for Harry Reid. If that isn’t enough said, what else is there to say?

*** To – John AZ –

Yes. I voted FOR HReid.

But, Who did the GOP put up against him?

A Nut Case – Angle – She wanted to END Soc Sec, and Medicare,

Said He didn’t care about Veterans,

or the Unemployed.

Union Workers make more $$$ and have Better benefits than Non-Union workers.

Obama's domestic agenda will always be the double bind, demagoguery and Tory Nationalism. Americans are expecting a show of developmental progress with this idiot. It WILL NOT happen. Obama is principled on the constitutional monarchy of Britain, and his mission in the US is to circumvent the Bill of Rights and collapse domestic and economic infrastructures. He's a taker, not a progress maker. How are people missing this?

This is horrifying news yet the audacity of the administration to turn lemons into lemonade at this critical time is unbelievable! My guess is that most media outlets will go strong on the payback of our tax money with Fiat buying Chrysler and provide scant coverage of yet another downturn indicator of a failing economy. The timing of all this coincidental "news" is also Obamaesque.

You forgot to mention the Obama administration decision to allow GM to "carry forward" losses incurred before and during the "bankruptcy" — never before allowed under bankruptcy law. This will result in GM being able to shelter any profits made in the "new GM" thus eliminating federal taxes and inflating "after tax" income to an inflated number. Just another move to con the taxpayers.

Please also remember the 789 dealerships and their 75,000 employees that were sacrificed by the Obama Administration during the Chrysler bankruptcy. These businessmen received zero compensation for their assets and for the goodwill earned during a lifetime of hard work representing Chrysler Corporation. These dealers were closed based on unproven, uncontested and inaccurate assertions that fewer dealers reduce the Manufacturer's cost of doing business.

Let us not forget that the auto company buyout was approved by President Bush, not Obama. It was in May/June of 2009 that Chrysler/GM respectively declared bankruptcy. So Obama was in office only 4 months when he pushed the companies into bankruptcy.

So if the bailout was indeed an error (debatable), let's put that error on the shoulders of the person who did it…Bush, not Obama.

This President will go down in history as using the taxpayer money to get his experience and education on running a business, some foreign policy writing, and some fiscal mis-management. His education has brought us to the edge of a crisis that has the potential to destroying the the future , rather then sustaining the American edge.

Mr. Obama is not even using the correct formula. He and his administration are padding the numbers because if they figures were true, we would be looking at almost 13% unemployment! Yeah, something to celebrate, isn't it? Even under President Clinton, we didn't have these problems and under President Bush, we ha jobs. Mr. Obama's useless commenting on how good things are and his wasting of our tax money on useless projects are just causing us to spiral into oblivion.

Since Mr. Obama took office, the private sector has suffered the worst setbacks ever and REAL recovery has not even come close to starting. Yet these bloated buffoons keep telling us that "everything is coming back". BULL – the only thing coming back are the government and big time union jobs. The private sector is so far behind it will be a wonder if we can actually come out from under this mess.

But America will survive as long as Conservatives keep pushing the Liberals off the cliff. The American People's eyes are opening more and more to the nonsensical idiocies of Mr.& Mrs. Obama. The USA will rise again! God help us to beat this regime in the next election!

Mr. Brownfield, when writing about the trials and tribulations of American corporations in the land of Obama please remember the difference between the legal standing of bond holders and stock holders once bankruptcy is declared. Now that I have jogged your memory maybe your readers would welcome a little clarification; say maybe an amended post.

As someone who has bought 3 Chrysler built minivans in the past, I was sad to see them go into bankruptcy. But both GM & Chrysler deserved no bailouts. These were Unconstitutional over-reaches by Congress & the President. American auto manufacturers were saddled with gold-plated union demands & poor management decisions. Ford had a better set of managers than the other two & survived without a bailout, but all 3 were unable to compete with foreign brand cars. Nowadays, foreign brand cars are increasingly built in the USA anyways, which shows that better management and lack of gold-plated union contracts can succeed in the USA still. But America should never again pick & choose which companies go bust & which don't. We are in a global economy and it's only good management & good workers that can produce good products at a good price which will succeed. I'm extremely skeptical that labor unions today are really good for America. Like bad management, they seem to focus on selfish short term gains at the expense of long term prosperity. More union power today will lead to fewer American jobs in the long run. Ditto for government red tape & regulations. Yes, we need basic government oversight to keep a level playing field, but it's not working very well & we no longer have equal free enterprise… we now have "crony capitalism", which is also killing off our economy & corrupting our politicians. Labor unions & big business SHOULD NOT be able to donate money into politicians election campaigns. ONLY US VOTERS AS INDIVIDUALS should be allowed to do so… and to unlimited amounts made instantly public via the internet so all voters know who is supporting which politician!

If your goal is to bankrupt America, if your goal is to turn America into a third world country then you've got to love Obama. If we are going to recover, and thrive again, he's got to be voted out of office. Nancy and Harry have got to go as well.

Let's see, it took George W. Bush the better part of 8 years to turn surplus into deficit and to assist in driving the U.S. economy into the deepest recession since the Great Depression. And it's taken Barack Obama the better part of 3 years to bring us back from the brink of insolvency but not yet return us to full employment.

Nice talking point, Mike Brownfield, and you did obviously make today's deadline. What you didn't do is solve the unemployment problem that persists largely because the construction market has slowed the result of foreclusures glutting the market. Around here (Utah), homebuilders have stayed at a standstill for a very long time and construction workers have been idle EXCEPT for those employed in projects funded by government stimulus money. Construction workers alone in Utah, a state with a high growth rate, account for a large percentage of the workforce.

Encouraging a climate in which businesses will expand and take on more employees sounds good, but, truth be told, very pro-business policies like deregulation, tax incentives and relevant labor provisions often have a downside not easily dismissed by those of us who have spent years thinking and talking about them. There is no trick involved in putting all the chips in the hands of businesses to inspire them to hire and expand. The trick is in not giving business so much latitude that environmental considerations, fair labor practices, and tax favoritism come back to haunt us. The anti-unions fervor on the Right, just for one potential issue, looms very large since workers' rights and the decades old history of gains in wages, benefits and work conditions are not dismissable.

Unemployment remains a big issue, one that could have been mitigated while accomplishing many other needed benefits for all of us. I'm talking about WPA or CCC projects. Those of us alive long enough remember the benefits of the '30's versions and the good feelings everyone involved in them had. What we have instead is, yes, unemployment and domestic projects long overdue for serious attention.

Not quite three years and not quite out of the doldrums. Care to give us eight years to get it right? After all, we gave Bush II that many.

Really Mr. Obama, what do you call victory when you keep private sector companies learning from their mistakes by expensing their mistakes on the uninvolved tax payers by force and the companies PAY YOU back when you didn't put a dime of your own money into it yet, you leave tax payers at a loss and call it a "victory?" How is that victory? Let the free market work without your overreach, Mr. President. That will benefit the world and will show true victory.

I would love to know where Ken Jarvis gets his "facts". I work for a non-union contractor and we have several employees that are FORMER union members and have said they would QUIT if we ever went union. Since 1985 we offer better pay, better benefits, and STILL beat the pants off any union company that thinks it can compete.

When are we going to stop saying "Worse than Expected." What were you expecting? This President's administration has been characterized by "Worse than Expected News" from day one. I don't know about you, but I expect it. It's about time you did too.

[…] Unemployment in the United States increased again last month to 9.1 percent, with the Obama economy adding only 54,000 jobs—the fewest in eight months. But despite the dismal news that 13.9 million Americans remain unemployed, President Barack Obama is holding a victory party today at a Chrysler plant in Toledo, Ohio, trumpeting the only jobs he can manage to create—those bought and paid for directly by the U.S. taxpayer. Heritage.org […]

Wasserman stated "we would be driving foreign cars absent the president's actions". Don't most of the elitists drive foreign made cars? What do they drive out in Hollywood? What kind of cars do the elitists drive in the suburbs of DC? They don't drive American cars. The only people driving American cars are those that can't afford the expensive foreign models. A perfect example would be federal employees. Honda and Toyota are their top choices followed by BMW and MB.

The only way this country is going to crawl out of the hole we are in is if some form of manufacturing begins. Federal run projects require federal money and there is none left. Why try and start up imaginary work projects that can't be paid for? Lift the taxes and regulations from companies that have outsourced everything Americans can do so we can start doing them again. Liberal whiners have to grin and bear it before there is no longer anything to bear.

Unemployment is closer to 20% and the entire country is still living as if it was 1985.

Obama says his policies are working. I agree. His goal has been to knock America down to what he thinks it should be. And to get people to look at him and his government for help for their essentials. So yes it is working for him, his unions and cronies, like Immelt. The Nov '08 election, he thinks is just a speed bump. And I just cannot seem to think of one thing he has done that helps Americans. Nothing. He did not retreat from Iraq, but is not helping them diplomatically, continuing their way to a seated Govt.. He increased troops strength in Afghan and developed John Kerry ROE that handicaps the troops, does not have a mission plan, except a withdrawal date, like its some kind of theatrical presentation. Nothing in his economic policies have worked for the American people and he wants to go back and do the same thing because the NY Times reporterette thinks it was not enough and the unions want more. Obamacare has increased costs dramatically for providers and subscribers. He sues states who do not want fed money and seek to protect its citizens, tells the governor of Texas he cannot have federal disaster aid, told the former owners of Chrysler they were greedy cause they wanted some money back. The 2 car companies paid one Govt account back, but took it from another Govt account to do so, car sales are down and it is a success story ? He has alienated other countries, who have been allies, And on and on. Yes, he did give the go ahead to take out the #1 enemy of America. However there is no reason there should not have been a standing order to do so. It was a photo op in a CIC jacket and the subject of speeches. Can you put bin Laden in your gas tank ? Rhetorically, no, but for daily living, for most of us, that deed does not help us. He has curtailed oil production to satisfy his base, thus making us more dependent on our adversaries. And some kind of twisted logic says Heritage does not talk about the "good" things this pres has done. Here is a news flash and don't thank me for it – Obama has not done one good thing for the American people; the ones who produce that is. Is that you or are you a Taker ? The takers have been recipients of more.

"Unemployment remains a big issue, one that could have been mitigated while accomplishing many other needed benefits for all of us. I’m talking about WPA or CCC projects. Those of us alive long enough remember the benefits of the ’30?s versions and the good feelings everyone involved in them had. What we have instead is, yes, unemployment and domestic projects long overdue for serious attention.

Not quite three years and not quite out of the doldrums. Care to give us eight years to get it right? After all, we gave Bush II that many."

Your understanding of history is wrong. Under FDR unemployment was consistently over 15%. One of his principal cabinet members in 1938 or 1939 finally admitted that all the government spending on WPA, TVA, the NRA and all the other ridiculous New Deal programs were for nought. Obama not George Bush is making the same mistake FDR made, trying to raise taxes and over regulate the economy. Bush did not cause the recession. We were due for one but it's severity was amplified by the housing crises which was mostly caused by the lowered lending standards Democrats demanded over the years so they could claim home ownership was increasing, just another one of their false rights like health care that appear nowhere in the constitution. You need to relearn history.

Interesting comments, scharlesc. At 74, I have pretty strong recall of how CCC and WPA helped keep employment at far better levels than it would otherwise have been during the years up to WWII. Many of my 20 aunts and uncles were among those CCC and WPA programs. Wartime austerity was what FINALLY pulled the country out of the Great Depression's deep hole, but works projects helped people survive at a time when there were no alternatives otherwise. My point is that we've now wasted time and opportunities for tide-us-over employment and important domestic projects completed. Obama is guilty and shouldn't be held harmless since he gave in to Right-wing fears of big government at a time when only big government could succeed.

The president still has time left to do something good on the jobs front. I'll be hoping the best, and you should, too, sharlesc, for the sake of America and the presently unemployed.

This propaganda continues to hold sway over a gullible public, The Democrats and Obama know this which is why they continue to obfuscate, demagogue and misdirect attention from the glaring evidence of their abysmal failures and, of course, Obama’s media does their very best to hide the truth. Obama's willingness to lie with no fear of being called on it and with no apparent evidence of a guilty conscience is indicative of a conviction that he is politically invulnerable. It’s the only thing that could explain his willingness or compulsion to do this on any given day. His media cabal, after their complete failure to perform any vetting of "The One" in the run up to 2008, must now be loath to participate in any efforts to expose what is rapidly becoming the horrible truth and their influential role in perpetrating the fraud that could possibly destroy this country. They will never admit culpability and will continue to blame the Republicans, their favorite, weak kneed, toothless, “can’t we be friends” scapegoats as America goes down in flames and they will forever take the credit for being influential in electing America’s first, (almost) African “American” President who “did his very best to save us from ourselves.” Excuse me while I go and puke.

What your article did not mention is that of the 54,000 new private industry jobs created in May…an estimated 30,000 of them were jobs at McDonald's.. Yes…things are definitely getting better…for McDonald's!!

Half of Last Month's New Jobs Came from a Single Employer — McDonald's

Mark Hemingway

June 3, 2011 11:13 AM

According to the unemployment data released this morning, the economy added only 54,000 jobs, pushing the unemployment rate up to 9.1 percent. However, this report from MarketWatch suggests the data is much worse than that:

McDonald’s ran a big hiring day on April 19 — after the Labor Department’s April survey for the payrolls report was conducted — in which 62,000 jobs were added. That’s not a net number, of course, and seasonal adjustment will reduce the Hamburglar impact on payrolls. (In simpler terms — restaurants always staff up for the summer; the Labor Department makes allowance for this effect.) Morgan Stanley estimates McDonald’s hiring will boost the overall number by 25,000 to 30,000. The Labor Department won’t detail an exact McDonald’s figure — they won’t identify any company they survey — but there will be data in the report to give a rough estimate.

If Morgan Stanley is correct, about half of last month's job growth came from the venerable fast-food chain. That is hardly the sign of a healthy economy.

Non union companies hire people with quality. People they can depend on. People they can expect to trust. An asset to the company. And free not to hire or dismiss the hired that fail to live up to expectations.

Union companies defend to keep poor quality, incompetent, liable people working and not by the freedom of the company to afford but by what the union wants, while the government bails out the losses of the union ruling company or the company folds or overseas.

And Mr. Obama clearly stated in Detroit? (somewhere) "What we did here, we're gonna do across America!" Think twice before you see any worth in a union, today! They're destroying the private sector with the President's support and at an expense to innocent others rather than those directly accountable. .

Unions DO NOT EQUAL FREEDOM! They equal dictatorship, communism. And they are given the President of America's full support

LIAR MONKEY doesn't really care about about JOBS or DRILLING FOR OIL or NATURAL GAS to run our cars and trucks. He wants to take us down, so he and the Enviros can run us back to a much lower life style for us "Proles" That's the best way to make us grateful for less and less.

Obama is the one person who should be credited with clearing the mess that George Bush had created….. he has done more good than bad…. but what is sorry to see is a minority feel he should go…. everyone knows why people want this…. he is the most courageous leader the American people have had for a long time and he would continue to lead the country further…… the republicans know this as does the country & the world…..

Nadeem, no offense, if you know what freedom is, you know it's being taken away by Obama and his administration (ALL of whoever that consists of?) He took advantage of the bush downfalls for use as excuses and cleaned NOTHING but the path of America's destruction with the money from the people he's destroying. It's called abuse of authority. It's called corruption. It's called take over of a once strong nation. America, where people were once respected for their self reliance. NOT GOVERNMENT DEPENDENCE!

Everywhere government is in control is in crisis! Why put government expenses AT OUR COSTS, in control of what WE BECOME ACCUSTOM TO DO FOR OURSELVES AS INDIVIDUAL HUMAN LIFE!!!?? Where we the people take responsibility and held accountable!! UNLIKE THE GOVERNMENT AND IT'S EXPENSES OBLIGATED ON US!!!!!

Nadeem, I hope people will come to know the strength and dignity freedom brings to a person's life before it no longer exists.

[…] President that Obama. With 30% of companies cutting employee health care benefits due to Obamacare, 9.1% unemployment rate, home values down to 2002 levels, energy prices skyrocketing, iand a litany of other reasons, […]

[…] Cal: So high unemployment is good politics? You sound positively Orwellian! Even during the “Great Society” spending years of Lyndon Johnson, unemployment averaged just 3.7%. Richard Nixon‘s jobless rate averaged 6.3% but was trending downward when he resigned. President Obama‘s unemployment numbers are trending upward. […]

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